The pact was the major development during a seven-day visit by Nicaragua's President-elect, Anastasio Somoza Debayle.
The agreement provides that:
- The Republic of China will import cotton, coal and beef from Nicaragua, which will purchase aluminum ingots and construction materials from Taiwan.
- Nicaragua will get assistance in developing its fertilizer, manmade fiber and oil refining industries. It will also import pulp, urea, maize seed and glassware from Taiwan.
President-elect Somoza was welcomed with full military honors, including a 21-gun salute and inspection of the honor guard, when he arrived in Taipei.
On his departure, he issued the following joint communique with Vice President C.K. Yen:
"A the invitation of the Government of the Republic of China, His Excellency General Anastasio Somoza Debayle, Supreme Commander of the Armed Forces and Chairman of the National Emergency Committee of the Republic of Nicaragua, and Senora Dona Hope Portocarrero de Somoza, accompanied by his Excellency Dr. Alejandro Montiel Arguello, Minister of Foreign Affairs, and other Nicaraguan officials, paid an official visit to the Republic of China from September 14 to September 21, 1974, and received a warm welcome from the Government and people of the Republic of China, reflecting fully the traditional friendship existing between the two countries.
"During the visit, His Excellency General Somoza called on His Excellency Yen Chia-kan, Vice President of the Republic of China, and His Excellency Chiang Ching-kuo, Premier of the Republic of China. He held talks with His Excellency Shen Chang-huan, Minister of Foreign Affairs, and other high ranking officials. They exchanged views in a cordial and friendly atmosphere on the world situation and matters of common interest.
"Both parties reiterated the firm position of their two Governments in upholding principles of international justice, freedom and human dignity, and agreed that all freedom-loving nations should work more closely together against the brutal forces inimical to basic human rights as well as for the safeguarding of their collective security and social progress.
"Both parties reaffirmed the traditional friendship between the two countries. Vice President Yen reiterated his sincere thanks for the cooperation and support accorded in the past years to the Government of the Republic of China by the Government of the Republic of Nicaragua in international affairs. General Somoza reassured Vice President Yen that, in view of the fact that the two countries share the same ideals of freedom and democracy, the new Government of the Republic of Nicaragua will resolutely maintain its political stand in support of the Government of the Republic of China.
"Both parties manifested their sincere desire that the cooperation between the two Republics should be further strengthened in all fields. General Somoza reiterated his gratitude for the aid given by the Government of the Republic of China to Nicaragua on the occasion of the earthquake that destroyed the City of Managua in December, 1972. He also expressed his satisfaction with the agricultural technical cooperation program being carried out in Nicaragua by the Government of the Republic of China.
"Both parties recognized that the Chinese people and the Nicaraguan people should in all respects make more direct contacts with each other, so as further to reinforce their cordial relations, and agreed that the Sino-Nicaraguan bilateral trade, economic and technical cooperation and cultural interflow should be further increased on a mutually beneficial basis.
"General Somoza commended the political stability, economic prosperity, social progress and military capability of defense which the Republic of China had achieved and expressed his sincere thanks for the warm welcome and hospitality accorded him, Senora Dona Hope Portocarrero de Sonoza, the Nicaraguan Foreign Minister and all the other members of his party in the course of his visit to the Republic of China.
"Vice President Yen was convinced that the visit of General Somoza to the Republic of China had contributed greatly to the further strengthening of the friendly relations between the Republic of China and the Republic of Nicaragua."
Premier Chiang Ching-kuo urged the people of the Republic of China to join with the government "to harden our will power, adhere to our principles, make sure of our target and solidify our ranks for the struggle ahead."
In his oral administrative report to the legislative Yuan, Premier Chiang said this should be done "so that we shall never go astray in this chaotic world nor become depressed because of the miasma of the moment."
"This is our best guarantee for victory and success," he said.
The Premier led members of his cabinet in reporting on the administration to the opening meeting of the 54th Session of the Legislative Yuan.
In a written report submitted to the Legislative Yuan earlier, the Premier reiterated the Chinese government's stand that it would stick to its anti-Communist policy, observe international obligations and always remain in the democratic camp.
The government will take part in international activities and fight the Chinese Communist attempt to isolate the Republic of China, he said.
The administrative report said Taipei-Washington relations were on the right track. The American government has reiterated its determination to maintain friendly relations and honor its defense commitment.
The Premier said his administration was watching the detente between Washington and Peiping closely. Besides strengthening political ties with the United States, the government had opened a consulate-general in Kansas City, Mo., and a consulate at Portland, Ore.
Despite its withdrawal from the United Nations in 1971, the Republic of China remains a member of four specialized agencies - the International Monetary Fund, the International Bank for Reconstruction and Development (World Bank), the International Development Association and the International Finance Corp. It still holds membership at government level in 11 international organizations, including the Asian Development Bank.
Reviewing the Republic of China's relations with East Asian and Pacific countries, the report said Taipei enjoys the most cordial relations with Seoul as shown in the reopening of a Chinese consulate at Pusan last May and the establishment of the Press Counselor's Office in the Chinese Embassy in Seoul.
Economic, trade and cultural relations with Japan were moving ahead despite the absence of formal diplomatic relations, the report continued. Relations with South Vietnam and Khmer remain close. Economic and trade relations with Singapore and Indonesia continued to develop.
Relations with two Middle Eastern countries were particularly close. Economic cooperation and trade ties with Saudi Arabia and Jordan were pushed with vigor.
The Premier urged Taipei be built into a "peaceful, prosperous, and orderly city" through joint efforts of municipal authorities and civic organizations.
Inspecting the city government, he said: "It is the duty of the government to make the city populace live happily and comfortably." This should be done, he added, "through the ceaseless efforts made in the fields of housing, employment, education and law and order."
Premier Chiang stressed that in the daily life of the people, "the most important thing is the stable and ample supply of food, fish and pork, vegetables and edible oils."
He commented that while the general order and security of Taipei is basically good, the city government should pay more attention to crime.
The Premier told Mayor Chang Feng-shu and his associates that the city government should construct housing units to take care of the needs of the people. The immediate goal should be 25,000 units, he said.
The Premier instructed that greater efforts be made to improve traffic order. He said a youth park is being established to offer sports and entertainment.
Chinese and Japanese scholars held a five-day symposium on China mainland affairs in Taipei.
The Japanese delegation of 30 scholars was headed by Prof. Hisaji Kuwabara and the Chinese delegation by Dr. Han Li-wu, director of the Institute of International Relations.
Dr. Han said the success of the conference should be attributed to the fruitful reports and enthusiastic discussions of the more than 80 scholars. He added that there would always be problems on the China mainland until the Peiping regime was destroyed.
Prof. Kuwabara said the Japanese participants had obtained new understanding of the problems on the China mainland.
The conference was conducted in panels with these conclusions:
Panel 1: Chinese Communist Military, Government and Party Affairs.
1. The Chinese Communists comprise a violent group which will never change its policy of world conquest. Domestically, the Chinese Communists will continue their tyrannical policies.
2. Chinese Communists claimed the anti-Confucius and anti-Lin Piao campaign was the continuation of struggle between the Kuomintang and the Communist party. In fact, the campaign is a reflection of the people's hostility toward Mao and his party.
3. After the 10th national congress of the Chinese Communist party, the anti-Confucius and anti-Lin Piao campaign became more radical.
4. The party struggle already extends to the military, which might start a civil war.
5. After Mao's death, a big struggle may bring collapse of the Chinese Communist regime.
Panel 2: Economic, Cultural and Educational Developments on the Mainland.
1. The Chinese Communists have no overall plan for agriculture.
2. To strengthen national defense and preserve the source of finances, farmers have been victimized.
3. Insufficient irrigation handicaps agricultural development and holds back the economy.
4. Harbors are poor and goods cannot be moved expeditiously.
5. Economic expansion into Southeast Asia is the first step to political invasion.
6. The content of education is the thought of Mao Tse-tung, which seeks to destroy education.
7. The anti-Confucius campaign is intended to destroy Chinese culture.
Panel 3: Peiping's international relations.
1. Attitude of Communist China toward free nations:
a. The Chinese Communists want to strengthen contradictions, especially in Japan.
b. But the Chinese Communists have many contradictions and weak points in their foreign policy.
2. The future of the Red China-U.S.S.R. dispute is uncertain.
Vice President C.K. Yen praised the Young Asians Recreation Tour for its role in "cultivating the concept of moving forward and in elevating the spirit of assisting others to improve themselves." Yen addressed the opening ceremonies.
The tour not only promotes the recreation of Asian youths but also their unity, Yen said. It is intended to combine learning with recreation and to provide a link between life and education.
"The concept of our program of vacation recreation has been changed to one of self-reliance. All activities are planned, directed and carried out by young people themselves," Yen said.
He warned youths of the danger of Communism and Communist subversion. "Communist horror is still threatening Asian security and setting the stage for human tragedy," he said. "We ourselves have pledged never to waver, never to compromise in our opposition to Communism. . .As we exchange anti-Communist experiences, you will come to understand the Communists better and we shall be able to agree on common goals. These will be among the significant accomplishments of the Young Asian's Tour.
"The Young Asian's Tour comes at a time when the adverse tide is running strong. This is a moment when young people can be helped in cultivating the concept of moving forward and in elevating the spirit of resolve to struggle for what is right."
The two-week tour, sponsored by the China Youth Corps, attracted 100 youth leaders from 21 countries and territories in Asia and the Pacific area. They came from South Korea, Japan, Hongkong, the Philippines, Fiji, Tonga, Indonesia, South Vietnam, Khmer, Thailand, Laos, Malaysia, Singapore, Jordan, Saudi Arabia, Lebanon, Turkey, Australia, New Zealand, West Samoa and the Republic of China.
Visiting Finance Minister K.T. Li was received by Crown Prince Khalid bin Abdul Aziz in Saudi Arabia.(File photos)
Saudi Arabia will "amply supply" the Republic of China with the crude oil it needs, Finance Minister K.T. Li said.
The finance minister said that half of free China's oil imports are from Saudi Arabia.
Returning from an eight-day visit to the Middle Eastern kingdom, Li said Saudi Arabia is the only oil-producing country to suggest a reduction in the price of oil.
The Saudi Arabians were overruled by the other 11 oil producers.
"Our cooperation with Saudi Arabia in economic and technical fields is being implemented smoothly," the finance minister reported.
The National Commercial Bank of Saudi Arabia and the Bank of Taiwan will establish business relations. "Their cooperation will help strengthen Sino-Saudi economic and trade ties," Li said.
Sino-Saudi technical cooperation covers agricultural and power development projects. The two countries have also decided to make joint investments in a fertilizer plant, oil refinery and methyl alcohol plant.
Minister Li said Saudi Arabia is a free market with low tariff rates. However, he added, it is a market where competition is keen.
"If we hope to expand our market in Saudi Arabia, our exporters must attach importance to quality and punctuality in delivery," he said. Exports to Saudi Arabia are primarily textiles, building materials and electrical machinary. Volume was US$25 million last year and is expected to top US$40 million this year.
Minister Li was the guest of Sheikh Mohammed Aba Al Khail, his Saudi counterpart, who visited the Republic of China last February. He was received by King Faisal and the Crown Prince.
The Republic of China and Saudi Arabia entered into a cooperation agreement on fishing.
The Yung Hsin Fishing Company of Kaohsiung sent two fishing boats to the Red Sea for the training of Saudi Arabians.
Chinese engineers are helping build a highway from Jeddah to Riyadh and through desert to Mecca.
The Retired Servicemen's Engineering Agency is the contractor.
RSEA has such heavy engineering equipment as bulldozers, graders, wheel loaders, excavators, tractor scrapers, heavy rollers and jackhammers.
President Gerald Ford's first policy speech to Congress was favorably received in the Republic of China.
Ford's emphasis on strong defense was deemed an indication that the new American president understands the nature of the Communists.
While Ford promised to follow the principles set forth in the Shanghai communique, observers noted with gratification that he did not indicate any plan to bring the United States closer to the Chinese Communist regime.
"The Ford pronouncement on Washington's China policy was less discouraging than expected," said one observer.
The United Daily News praised his reference to defense strength as "judicious."
The United States has been able to check Communist expansion during the postwar era not because American diplomats are adept at negotiations but because the United States has maintained a strong defense posture, the paper said.
Local papers treated Ford's pledge to continue the Nixon policy on Red China with reserve.
The United Daily News said Nixon's 1972 visit to the China mainland was a "heavy blow" to the Chinese people.
The biggest mistake Henry Kissinger has committed, the paper said, is acceptance of the "outdated 19th century dictum that my enemy's enemy is my friend."
"To the Communists an enemy is always an enemy and nothing can change that," the paper added.
The Central Daily News said American efforts to establish detente with Peiping had not only failed to "unlock" the door of the China mainland but had aggravated the crisis in Asia.
"Although Washington has time and again reaffirmed its commitments to its allies and continued military and economic aid, the fact is that the United States is gradually pulling back its troops in Southeast Asia and slashing its aid."
While expressing confidence in Ford's pledge to stand by allies, the paper said "more than words are needed to effectively check Communist aggression."
Postal service has been extended to Nansha Chuntao (Spratlys) and Tungsha Chuntao (Pratas) for the benefit of island garrison troops and their families.
The Nansha group is located 250 miles east of South Vietnam, 200 miles west of the Philippines, 700 miles southeast of the South China coast and 1,100 miles south of Taiwan. It is also claimed by the Vietnamese, Filipinos and Malaysians.
The Republic of China has maintained a sizable garrison force on Taiping, the major islet in the group, since 1956.
Early this year, the Saigon government occupied several uninhabited islets in the same group.
The Tungsha group is some 230 miles southwest of the southernmost tip of Taiwan. The Republic of China has also stationed a garrison force there.
Vice Adm. Edwin K. Snyder, new commander of the United States Taiwan Defense Command, was warmly welcomed as he arrived in Taipei. He was accorded full military honors at the airport.
Admiral Snyder relieves Vice Adm. Philip A. Beshany, who retired after 40 years of service with the U.S. Navy.
Before his Taiwan assignment, Admiral Snyder, 52, was the U.S. Navy's chief of legislative affairs in Washington, D.C.
A 1943 graduate of Annapolis, he is a submariner with extensive combat service in both World War II and the Vietnam War.
In 1968-69, he commanded the heavy cruiser Newport News in combat operations off the coast of Vietnam. The ship surpassed all previous records for naval gunfire support, firing 59,000 rounds at enemy targets.
Admiral Snyder commanded two amphibious groups and the U.S. Atlantic Fleet's Amphibious Training Command.
His decorations include three awards of the Legion of Merit, the Bronze Star Medal with Combat "V" and the Navy Commendation Medal with Combat "V." He also wears the Submarine Combat Insignia with three stars.
Admiral Beshany received the Order of Cloud and Banner with Grand Cordon from Premier Chiang Ching-kuo in recognition of his contributions to the promotion of Sino-American military cooperation and friendship.
A reception was given by the Premier after the ceremony to bid farewell to Admiral Beshany and welcome Admiral Snyder. Among those present were U.S. Ambassador and Mrs. Leonard Unger; Mrs. Beshany; Mrs. Snyder; Major General Slade Nash, chief of the U.S. Military Assistance Advisory Group, and Mrs. Nash; Mrs. Chiang; Vice Premier and Mrs. Hsu Ching-chung; Foreign Minister and Mrs. Shen Chang-huan; National Defense Minister and Mrs. Kao Kuei-yuan; and General Lai Ming-tang, chief of the general staff, and Mrs. Lai.
Admiral Beshany said the Chinese Communists would not launch an attack on Taiwan in the foreseeable future.
However, he cautioned, "the Chinese Communists on the other side of the Taiwan Straits are putting a lot of money into building ships equipped with missiles."
He told reporters that Asian countries can be assured that "the Republic of China will continue to provide a bulwark against aggression and exert a positive influence for peace in the Western Pacific.
"For almost 20 years, the United States has been committed to a policy of mutual defense with the Republic of China. The long association of our armed forces has done much to ensure that peace and stability is a reality in this part of the world. "
Beshany said he was proud of the role that the U.S. forces have played in this cooperative endeavor "under our mutual defense treaty."
He said he was "impressed with the dedication, competence and spirit of the Chinese armed forces."
'The citizens of the Republic of China can be proud of the tradition of their military men and women," he added.
Beshany was accorded full military honors upon his departure. On hand to see him off were Gen. Lai Ming-tang, chief of the general staff, and many other government and military leaders,
Dr. Ku Cheng-kang, honorary chairman of the World Anti-Communist League, expressed hope that the U.S. Congress and government would not agree to "normalize relations" with the Chinese Communists.
Dr. Ku was commenting on joint Congressional proposal to support the Republic of China.
The text of his statement follows:
"By jointly proposing a bill reiterating U.S. support for the Republic of China, the 105 American Congressmen, including the Hon. Trent Lott, have not only manifested their noble friendship for this nation but also heartily echoed the righteous inner voice of the American public. They command the highest respect of the Chinese people.
"The United States has just ushered in a new administration. This ought to be an appropriate moment for the U.S. Congress and government to review and revise the policy of 'normalizing relations' with the Chinese Communists.
"This is because facts have clearly shown that this policy has, instead of helping the United States achieve its goals, led to certain deplorable consequences.
"America's attempt to befriend Peiping in order to restrain Soviet Russia has only helped the Chinese Communists to expand their influence and caused the free Asian nations to hesitate to trust the United States and to vacillate.
"Washington has tried to improve relations with Peiping but the Chinese Communists, instead of abandoning their fundamental anti-American stand, have openly attacked the superpower hegemony of the United States and Soviet Russia.
"At the same time, they have been using the United Nations as a base for international united front maneuvers to create a 'third world' and isolate the United States. The U.S. government wants to have the friendship of the 700 million people on the Chinese mainland, but acting contrary to their desire for freedom, is actually prolonging their agonies by fostering the Chinese Communist tyranny.
"I must point out that because of the continued existence and growing strength of the Republic of China, and because of the forces of freedom with Taiwan as their rallying point, the Communist rule on the mainland, despite more than two decades of incessant struggle, is still in a state of turmoil, and the Red Chinese expansionist ambitions in Asia have been effectively checked.
"Such being the case, further strengthening of the relations between the United States and the Republic of China as allies is indeed a prerequisite of Asian-Pacific security.
"I sincerely hope that the United States will adopt a policy of seeking peace through strength and will help the free Asian nations strengthen themselves so as to preserve freedom, democracy and security in the Asian-Pacific region.
"I further hope that the United States will abide by its traditional spirit and take active steps to unite the free nations and, working in concert with all the forces of the free world, to consolidate world peace."
Six major news associations in the Republic of China set up a national Press Council in Taipei to coordinate mass media policies.
The groups are the Taipei Newspaper Association, Taiwan Newspaper Association, Chinese Association of News Agencies, Chinese Radio Broadcasters Association, Chinese Television Association and Taipei Journalists Association.
Ma Hsin-yeh, board chairman of the Central News Agency, presided over the meeting of more than 100. He said the Press Council will upgrade the moral standards of the media and safeguard freedom of the press.
Cheng Tsang-po, chairman of the defunct Taipei Newspaper Jury, was elected chairman.
More than 1,200 journalists observed their own day in September at the Armed Forces Cultural Activities Center in Taipei.
Fredrick F. Chien, director-general of the Government Information Office, urged the mass media to fulfill their social responsibilities.
He suggested that the press introduce more educational knowledge, carry more beneficial reporting and serve as a bridge between the government and the people.
Dr. Chien read a congratulatory message from Premier Chiang Ching-kuo, who urged local journalists to demonstrate moral courage and inspire courage among their readers.
Provincial authorities have decided to build an extensive rural highway network in the next six years.
Roads will reach 1,272 villages with a population of 1,252,530. Some 500 roads totaling 3,000 kilometers will be built.
Half of the funds will come from the Central Government and the remaining half from the Taiwan Provincial Government and local governments.
Completion of the network is expected to double the income of the farm families living in the area.
Construction of the southern section of the North-South Freeway has started.
The 144-kilometer section between Silo and Fengshan will be completed by the end of 1977 by the Retser Engineering Agency and BES Engineering Company.
Construction of seven bridges will be decided by open tender in which local contractors will have preference.
A 31-kilometer section of the highway between Sanchung west of Taipei and Chungli was opened to traffic in July. A short stretch between Chungli and Yangmei will be completed by the end of this year.